Letters from London: the personal blog of Natasha Loder of The Economist

Wednesday, June 10, 2009

An odd REDD project in Aitape Lumi

Almost daily, now, I am being sent documents from Papua New Guinea that are worrying and mystifying in equal parts.

The latest comes with regards to a REDD pilot project for Aitape Lumi, which is in West Sepik Province, the north-westernmost province of Papua New Guinea. (Number 19 on the map to the left, and with thanks to Wikipedia.)

This latest letter is from Theo Yasause, executive director of the Office of Climate Change, and is addressed to the managing director of Carbon (PNG) Dev. Corporation on March 24th of this year and says that the Office of Climate Change has no objections to the company developing a pilot REDD project in the area.

The letter, reproduced below, continues “your request to be allocated 50 million voluntary credits (CERs) can be granted subject to the development of the PDD [project documentation] by a third party..”

This is somewhat unexpected as, according to a Reuters report, the Office of Climate Change "suspended in January all plans to sell rights to the carbon stored in its rainforests after deals sparked land ownership disputes". Mr Yasause went on, "All projects are suspended while we get some experience".

I guess Mr Yasause forgot about this one. He also seems to have forgotten something else. The letter continues, “If you agree, I will request South Pole Ltd Carbon Trading Company based in Zurick Switzerland to assist you develop the project to have the credits ready for sale”.

Lets make one thing clear, senior industry figures tell me that South Pole is a very reputable Swiss based firm. So I showed this latest letter to Christian Dannecker, at South Pole, and he said they had never seen this letter, had never heard of Carbon (PNG) Dev. Corporation, and knew nothing about these projects.

Mr Dannecker has some observations and questions of his own. Why does does the letter refer to CER credits? This is a good question, voluntary credits go under the term Verified Emissions Reduction or VER. Where does the value of 50m voluntary credits come from? Another good question, the value of the carbon in any forest is not down to the government to decide. Finally, Mr Dannecker observes that merely a letter of support or approval is satisfactory in such circumstances.

South Pole Carbon is already formulating a complaint to the Office of Climate Change about the use of his company’s name in this context. He adds, “we appreciate that he thinks of us but would like to be informed beforehand”.